What changed in this filing

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Item 1. Financial Statements

2025-08-08 compared with 2025-05-09 · 180 added, 110 removed, 461 unchanged (39% of the section changed)

16 unchanged sentences

* Amounts derived from the audited

financial statements for the year ended December 31, 2024.

See accompanying notes to consolidated financial

consolidated financial statements for the year ended December 31, 2024.

See accompanying

notes to consolidated financial statements.

ALTO INGREDIENTS, INC.

9 unchanged sentences

Total current liabilities

Long-term debt

Long-term debt, net

Operating leases, net of current portion

6 unchanged sentences

1,684 shares authorized;

no shares issued and outstanding as of March 31, 2025 and December 31, 2024;

no shares issued and outstanding as of June 30, 2025 and December 31, 2024;

1,581 shares authorized;

927 shares issued and outstanding as of March 31, 2025 and December 31, 2024;

liquidation preference of $18,075 as of March 31, 2025

927 shares issued and outstanding as of June 30, 2025 and December 31, 2024;

liquidation preference of $ 18,075 as of June 30, 2025

Common stock, $ 0.001 par value;

300,000 shares authorized;

76,497 and 76,565 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

77,201 and 76,565 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

Non-voting common stock, $ 0.001 par value;

3,553 shares authorized;

1 share issued and outstanding as of March 31, 2025 and December 31, 2024

1 share issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

Additional paid-in capital

3 unchanged sentences

Total Liabilities and Stockholders’ Equity

* Amounts derived from the

audited financial statements for the year ended December 31, 2024.

See accompanying notes to consolidated financial

* Amounts derived from the audited

consolidated financial statements for the year ended December 31, 2024.

See accompanying

notes to consolidated financial statements.

ALTO INGREDIENTS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except per share

(unaudited, in thousands, except per

Three Months Ended

Six Months Ended

Cost of goods sold

Gross profit (loss)

Selling, general and administrative expenses

1 unchanged sentence

Interest expense, net

Other income, net

Other income (expense), net

Loss before provision for income taxes

4 unchanged sentences

Weighted-average shares outstanding, basic and diluted

See accompanying notes to consolidated financial

See accompanying

notes to consolidated financial statements.

ALTO INGREDIENTS, INC.

1 unchanged sentence

(unaudited, in thousands)

Three Months Ended

Six Months Ended

Operating Activities:

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Depreciation and amortization of intangibles

Gains on derivative instruments

Non-cash compensation

Adjustments to reconcile net loss to Net cash used in operating activities:

Depreciation and amortization

Inventory valuation

Gains on derivative instruments

Stock-based compensation

Amortization of deferred financing fees

5 unchanged sentences

Accounts payable and accrued liabilities

Net cash (used in) provided by operating activities

Net cash used in operating activities

Investing Activities:

7 unchanged sentences

Net cash provided by financing activities

Net decrease in cash, cash equivalents and restricted cash

Net change in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

6 unchanged sentences

Interest paid

Interest expense capitalized

See accompanying notes to consolidated financial

Capitalized interest

Shares vested for Eagle Alcohol

See accompanying

notes to consolidated financial statements.

ALTO INGREDIENTS, INC.

2 unchanged sentences

Preferred Stock

Comprehensive

Additional Paid-In

Other Comprehensive

Balances, January 1, 2025

5 unchanged sentences

$ ( 836,157 )

Stock-based compensation

Restricted stock issued to employees and directors, net of cancellations and tax

Shares vested for Eagle Alcohol

Preferred stock dividends

Balances, June 30, 2025

$ ( 847,469 )

Balances, January 1, 2024

5 unchanged sentences

$ ( 775,953 )

accompanying notes to consolidated financial statements.

Stock-based compensation

Restricted stock issued to employees and directors, net of cancellations and tax

Preferred stock dividends

Balances, June 30, 2024

$ ( 779,375 )

See accompanying

notes to consolidated financial statements.

ALTO INGREDIENTS, INC.

72 unchanged sentences

sells essential ingredients such as dried yeast for human and pet food and to animal feed customers, including distillers grains to export

markets, sells those same and other feed co-products to dairy operators and animal feedlots and sells corn oil to poultry, renewable diesel and biodiesel

customers, in each case generally without requiring collateral.

markets, sells those same and other feed co-products to dairy operators and animal feedlots and sells corn oil to poultry, renewable diesel

and biodiesel customers, in each case generally without requiring collateral.

The carrying amount of accounts receivable is

3 unchanged sentences

Of the accounts receivable balance, approximately

$ 52,108,000 and $ 44,750,000 at March 31, 2025 and December 31, 2024, respectively, were used as collateral under Kinergy’s operating

$ 49,181,000 and $ 44,750,000 at June 30, 2025 and December 31, 2024, respectively, were used as collateral under Kinergy’s operating

line of credit.

The allowance for credit losses was $ 38,000 and $ 23,000 as of March 31, 2025 and December 31, 2024, respectively.

Company recorded bad debt expense of $ 15,000 and bad debt recoveries $ 27,000 for the three months ended March 31, 2025 and 2024, respectively.

The allowance for credit losses was $ 22,000 and $ 23,000 as of June 30, 2025 and December 31, 2024, respectively.

recorded a credit loss recovery $ 16,000 and of $ 20,000 for the three months ended June 30, 2025 and 2024, respectively.

The Company recorded a credit loss recovery of $ 1,000 and $ 47,000 for the six months ended June 30, 2025 and

2024, respectively.

The Company does not have any off-balance sheet credit exposure related to its customers.

21 unchanged sentences

Kodiak Carbonic’s unaudited net sales for

the three months ended March 31, 2025 and 2024 were $ 2.1 million and $ 1.3 million and its unaudited net income was $ 1.5 million and $ 0.4

the three months ended June 30, 2025 and 2024 were $ 2.4 million and $ 1.4 million and its unaudited net income was $ 1.5 million and $ 0.5

million, respectively.

The following table presents the Company’s unaudited pro forma combined financial information assuming the

acquisition occurred on January 1, 2024 (dollars in thousands except per share amounts):

Kodiak Carbonic’s unaudited net sales for the six months ended June 30, 2025 and 2024 were $ 4.5 million and

$ 2.7 million and its unaudited net income was $ 3.0 million and $ 0.9 million, respectively.

The following table presents the Company’s

unaudited pro forma combined financial information assuming the acquisition occurred on January 1, 2024 (dollars in thousands except per

share amounts):

Three Months Ended

2 unchanged sentences

Basic and diluted net loss per share – pro forma

Six Months Ended

Revenues – pro forma

Net loss attributable to common stockholders – pro forma

Basic and diluted net loss per share – pro forma

The following preliminary allocation of the estimated

1 unchanged sentence

of uncollectible accounts receivable are not considered material due to the short-term nature and customer collection history.

The preliminary

estimate of working capital, property and equipment and intangibles are under review by management and are subject to change.

these assumptions, the preliminary purchase price allocation is as follows (in thousands):

price allocation is as follows (in thousands):

Cash and equivalents

4 unchanged sentences

Current liabilities

Total liabilities

Total liabiltiies

Net tangible assets acquired

1 unchanged sentence

Total Purchase Price

For the identifiable intangible assets, the Company

has estimated 9 years for useful lives for customer relationships.

For the three months ended March 31, 2025, the Company recorded amortization

of these intangibles of $102,000.

Any changes to the initial estimates of the fair value of the acquired assets and assumed liabilities

will be recorded as adjustments to those assets and liabilities and residual amounts will be allocated to goodwill if net assets acquired

are less than the purchase price.

For the identifiable intangible assets, the Company has estimated 9

years for useful lives for customer relationships.

For the three and six months ended June 30, 2025, the Company recorded amortization

of these intangibles of $ 102,000 and $ 204,000 , respectively.

Any changes to the initial estimates of the fair value of the acquired assets

and assumed liabilities will be recorded as adjustments to those assets and liabilities and residual amounts will be allocated to goodwill

if net assets acquired are less than the purchase price.

The Company did not incur any material acquisition costs.

14 unchanged sentences

and essential ingredients, and sales of fuel-grade ethanol sourced from third parties, and (3) Western production, which includes the

Company’s two western production facilities and, beginning for the three months ended March 31, 2025, its liquid CO 2

Company’s two western production facilities and, beginning for the three and six months ended June 30, 2025, its liquid CO 2

plant on an aggregated basis (“Western production”).

For the three and six months ended June 30, 2025,

capital expenditures incurred by the Pekin Campus segment were approximately $ 0.5 million and $ 1.0 million, respectively, and none for

the Western production segment.

For the three and six months ended June 30, 2024, capital expenditures incurred by the Pekin Campus segment

were approximately $ 3.1 million and $ 6.9 million, respectively, and $ 1.6 million and $ 2.4 million for the Western production segment,

respectively.

The following tables set forth certain financial

1 unchanged sentence

Three Months Ended

Six Months Ended

Pekin Campus production, recorded as gross:

29 unchanged sentences

Intersegment eliminations

Gross loss as reported

Gain (loss) before provision for income taxes :

Gross profit (loss) as reported

Income (loss) before provision for

income taxes:

Pekin Campus production

2 unchanged sentences

Corporate and other

Depreciation and amortization expense:

and amortization expense:

Pekin Campus production

1 unchanged sentence

Corporate and other

Interest expense, net of capitalized interest:

Interest expense, net of capitalized

Pekin Campus production

12 unchanged sentences

determined on a first-in, first-out basis.

Inventory is net of a valuation allowance of $ 1,170,000 and $ 2,050,000 as of March 31, 2025

Inventory is net of a valuation allowance of $ 1,649,000 and $ 2,050,000 as of June 30, 2025

and December 31, 2024, respectively.

21 unchanged sentences

recognized immediately in cost of goods sold.

For the three months ended March 31, 2025 and 2024, the Company did not designate any of

its derivatives as cash flow hedges.

For the three and six months ended June 30, 2025 and 2024, the Company did not designate

any of its derivatives as cash flow hedges.

Commodity Risk – Non-Designated Hedges

5 unchanged sentences

The Company recognized

net gains of $ 1,773,000 and $ 3,338,000 as the change in the fair value of these contracts for the three months ended March 31, 2025 and

net gains of $ 2,598,000 and $ 8,231,000 as the change in the fair value of these contracts for the three months ended June 30, 2025 and

2024, respectively.

Non – Designated Derivative

Instruments – The classification and amounts of the Company’s derivatives not designated as hedging instruments,

and related cash collateral balances, are as follows (in thousands):

As of March 31, 2025

The Company recognized net gains of $ 4,371,000 and $ 11,570,000 as the change in the fair value of these contracts

for the six months ended June 30, 2025 and 2024, respectively.

Non-Designated Derivative Instruments

– The classification and amounts of the Company’s derivatives not designated as hedging instruments, and related cash collateral

balances, are as follows (in thousands):

As of June 30, 2025

Type of Instrument

20 unchanged sentences

The classification and amounts of the Company’s

realized gains for its derivatives not designated as hedging instruments are as follows (in thousands):

Realized Gains

realized and unrealized gains and losses for its derivatives not designated as hedging instruments are as follows (in thousands):

Realized Gains (Losses)

For the Three Months Ended

3 unchanged sentences

Cost of goods sold

Unrealized Gains

Realized Gains (Losses)

For the Six Months Ended

Type of Instrument

Statements of Operations Location

Commodity contracts

Cost of goods sold

Unrealized Gains (Losses)

For the Three Months Ended

3 unchanged sentences

Cost of goods sold

Unrealized Gains (Losses)

For the Six Months Ended

Type of Instrument

Statements of Operations Location

Commodity contracts

Cost of goods sold

Long-term borrowings are summarized as follows

7 unchanged sentences

Excess Availability – As of

March 31, 2025, Kinergy had $ 11.7 million in unused borrowing availability under its line of credit and the Company had $ 65.0 million

that may be available for capital improvement projects under its Orion term loan, subject to certain conditions.

June 30, 2025, Kinergy had $ 4.8 million in unused borrowing availability under its line of credit and the Company had $ 65.0 million that

may be available for capital improvement projects under its Orion term loan, subject to certain conditions.

COMMITMENTS AND CONTINGENCIES.

Sales Commitments – At March

Sales Commitments – At June

30, 2025, the Company had entered into sales contracts with its major customers to sell certain quantities of alcohol and essential ingredients.

The Company had open indexed-price alcohol sales contracts for 92,716,000 gallons as of March 31, 2025 and open fixed-price alcohol sales

contracts totaling $ 170,436,000 as of March 31, 2025.

The Company had open indexed-price alcohol sales contracts for 73,711,000 gallons as of June 30, 2025 and open fixed-price alcohol sales

contracts totaling $ 173,160,000 as of June 30, 2025.

The Company had open fixed-price sales contracts for essential ingredients totaling

$ 9,085,000 and open indexed-price sales contracts of essential ingredients for 19,000 tons as of March 31, 2025.

$ 10,025,000 and open indexed-price sales contracts of essential ingredients for 75,000 tons as of June 30, 2025.

These sales contracts

1 unchanged sentence

Purchase Commitments – At

March 31, 2025, the Company had indexed-price purchase contracts to purchase 11,766,000 gallons of alcohol and fixed-price purchase contracts

June 30, 2025, the Company had indexed-price purchase contracts to purchase 17,955,000 gallons of alcohol and fixed-price purchase contracts

to purchase $ 563,000 of alcohol from its suppliers.

The Company had fixed-price purchase contracts to purchase $ 32,816,000 of corn from

its suppliers as of March 31, 2025.

The Company had indexed-price contracts to purchase 6,743,000 MMBTU of natural gas as of March 31,

its suppliers as of June 30, 2025.

The Company had indexed-price contracts to purchase 4,116,000 MMBTU of natural gas as of June 30, 2025.

The Company also had future commitments for certain capital projects totaling $ 11,498,000 .

These purchase commitments are scheduled

to be satisfied throughout 2025.

These purchase commitments are scheduled to

be satisfied throughout 2025.

Litigation – General –

10 unchanged sentences

will have a material impact on the Company’s financial condition or results of operations.

PENSION PLANS.

PENSION AND RETIREMENT BENEFIT PLANS.

The Company sponsors a defined

14 unchanged sentences

balance sheet in other assets.

For the three months ended March 31, 2025, the Retirement Plan’s net periodic benefit was $ 22,000 ,

comprised of $ 313,000 in expected return on plan assets, partially offset by $ 234,000 in interest cost and $ 57,000 in service cost.

the three months ended March 31, 2024, the Retirement Plan’s net periodic expense was $ 13,000 , comprised of $ 222,000 in interest

cost and $ 67,000 in service cost, partially offset by $ 276,000 of expected return on plan assets.

For the three months ended June

30, 2025, the Retirement Plan’s net periodic benefit was $ 22,000 , comprised of $ 313,000 in expected return on plan assets, partially

offset by $ 234,000 in interest cost and $ 57,000 in service cost.

For the six months ended June 30, 2025, the Retirement Plan’s net

periodic benefit was $ 43,000 , comprised of $ 625,000 in expected return on plan assets, partially offset by $ 468,000 in interest cost and

$ 114,000 in service cost.

For the three months ended June 30, 2024, the Retirement Plan’s net periodic expense was $ 13,000 , comprised

of $ 222,000 in interest cost and $ 67,000 in service cost, partially offset by $ 276,000 of expected return on plan assets.

months ended June 30, 2024, the Retirement Plan’s net periodic expense was $ 26,000 , comprised of $ 444,000 in interest cost and $ 134,000

in service cost, partially offset by $ 552,000 of expected return on plan assets.

The Postretirement Plan provides

9 unchanged sentences

The Company’s funding policy is to make the minimum annual contribution required by applicable regulations.

For the three months

ended March 31, 2025, the Postretirement Plan’s net periodic expense was $ 25,000 , comprised of $ 48,000 of interest cost and $ 4,000

of service cost, partially offset by $ 27,000 in amortization of net gains.

For the three months ended March 31, 2024, the Postretirement

Plan’s net periodic expense was $ 54,000 , comprised of $ 49,000 of interest cost and $ 5,000 of service cost.

For the three months ended June

30, 2025, the Postretirement Plan’s net periodic expense was $ 25,000 , comprised of $ 48,000 of interest cost and $ 4,000 of service

cost, partially offset by $ 27,000 in amortization of net gains.

For the six months ended June 30, 2025, the Postretirement Plan’s

net periodic expense was $ 50,000 , comprised of $ 97,000 of interest cost and $ 7,000 of service cost, partially offset by $ 54,000 in amortization

of net gains.

For the three months ended June 30, 2024, the Postretirement Plan’s net periodic expense was $ 54,000 , comprised of

$ 49,000 in interest cost and $ 5,000 in service cost.

For the six months ended June 30, 2024, the Postretirement Plan’s net periodic

expense was $ 108,000 , comprised of $ 98,000 in interest cost and $ 10,000 in service cost.

FAIR VALUE MEASUREMENTS.

1 unchanged sentence

used in valuation techniques into three levels, as follows:

● Level 1 – Observable inputs – unadjusted quoted prices in active markets for identical assets

and liabilities;

● Level 2 – Observable inputs other than quoted prices included in Level 1 that are observable for

the asset or liability through corroboration with market data;

● Level 3 – Unobservable inputs – includes amounts derived from valuation models where one or

more significant inputs are unobservable.

For fair value measurements using significant unobservable inputs, a description of the inputs

and the information used to develop the inputs is required along with a reconciliation of Level 3 values from the prior reporting period.

● Level 1 – Observable inputs – unadjusted quoted

prices in active markets for identical assets and liabilities;

● Level 2 – Observable inputs other than quoted prices

included in Level 1 that are observable for the asset or liability through corroboration with market data;

● Level 3 – Unobservable inputs – includes amounts

derived from valuation models where one or more significant inputs are unobservable.

For fair value measurements using significant unobservable

inputs, a description of the inputs and the information used to develop the inputs is required along with a reconciliation of Level 3

values from the prior reporting period.

Pooled separate accounts –

Pooled separate accounts invest primarily in domestic and international stocks, commercial paper or single mutual funds.

The net asset

value is used as a practical expedient to determine fair value for these accounts.

Each pooled separate account provides for redemptions

by the Retirement Plan at reported net asset values per share, with little to no advance notice requirement, therefore these funds are

classified within Level 2 of the valuation hierarchy.

Pooled separate accounts invest primarily in domestic and international stocks, commercial paper or single mutual funds at December 31,

The net asset value is used as a practical expedient to determine fair value for these accounts.

Each pooled separate account provides

for redemptions by the Retirement Plan at reported net asset values per share, with little to no advance notice requirement, therefore

these funds are classified within Level 2 of the valuation hierarchy.

Other Derivative Instruments –

3 unchanged sentences

Long-Lived Assets – Long-lived

assets consist of the Company’s estimated fair value associated with its Magic Valley facility.

See Note 1 for additional information.

The fair value of the long-lived assets are based on present value of estimated future cash flows and are designated as Level 3 inputs.

assets consist of the Company’s estimated fair value associated with its Magic Valley facility at December 31, 2024.

The fair value

of the long-lived assets are based on present value of estimated future cash flows and are designated as Level 3 inputs.

The following table summarizes recurring and nonrecurring

fair value measurements by level at March 31, 2025 (in thousands):

Derivative financial instruments

fair value measurements by level at June 30, 2025 (in thousands):

Derivative instruments

The following table summarizes recurring and nonrecurring

2 unchanged sentences

Long-lived assets – Magic Valley

Defined benefit plan assets(1) (pooled separate accounts):

Defined benefit plan assets(1)

(pooled separate accounts):

Small/Mid U.S.

23 unchanged sentences

earnings per share (in thousands, except per share data):

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Preferred stock dividends

Basic and diluted loss per share:

Net loss attributable to common stockholders

Three Months Ended March 31, 2024

Loss attributable to common stockholders

Six Months Ended June 30, 2025

Preferred stock dividends

Basic and diluted loss per share:

Net loss attributable to common stockholders

There were additional aggregate potentially

dilutive weighted-average shares of 981,000 from convertible securities outstanding for the three months ended March 31, 2025 and 2024.

These securities were not considered in calculating diluted net loss per share for the three months ended March 31, 2025 and 2024, as

their effect would have been anti-dilutive.

Loss attributable to common stockholders

Three Months Ended June 30, 2024

Preferred stock dividends

Basic and diluted loss per share:

Loss attributable to common stockholders

Six Months Ended June 30, 2024

Preferred stock dividends

Basic and diluted loss per share:

Loss attributable to common stockholders

There were an additional aggregate potentially

dilutive weighted-average shares of 981,000 from convertible securities outstanding for the three and six months ended June 30, 2025 and

June 30, 2024.

These securities were not considered in calculating diluted net income (loss) per share for the three and six months ended

June 30, 2025 and 2024, as their effect would have been anti-dilutive.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements